Math/Stat 170: Introduction to Actuarial Science

Meets: Both SectionsTu 2:30--3:20 in Kran G016

Section 1 Th 2:30--3:20 in SC 283

Section 2Th 3:30--4:20 in FS 1195

Instructor: Jeff Beckley

Office: 703MathematicsBuildingPhone: 49—41861 or 317-698-8543

E-mail:

Web

Office Hours:

Tuesday 1:00 – 2:30

Thursday 1:00 – 2:30

or by appointment

General Information

The notes for the Interest Theory portion of the class are on the website. Please download and print this PDF document. Otherwise, there will be no official textbook. However, there will be several relevant books on reserve in the Undergraduate Library:

  • Introduction to Ratemaking and Loss Reserving for Property and Casualty Insuranceby Robert L. Brown, Actex Publications, 1993.
  • Principles of Insurance: Life, Health, and Annuities by Harriet Jones and Dani Long, LOMA, 1996.

Calculators

Any calculator that can do logs and exponentials will suffice. I strongly recommendthat you use one of the calculators approved for use on the actuarial exams. (There are only a few that are allowed.) The two best are the Texas Instruments TI30XII and the Texas Instruments BAII Plus. Both come in either solar or battery powered versions. The TI30XII is better for the Exam P but will not suffice for Exam FM since it cannot do financial calculations. The BAII Plus covers both exams, but is more complicated to use and is not quite as good on the first exam as the TI30 XII. Some people get both as there is no limit on the number of calculators you can take into the exam.

Many of the problems in this class can be solved simply with a financial calculator. In this class, you will always be expected to solve the problems using the formulas, not using a financial calculator. You will be required to "show work" which means writing down the formulas being used. Of course, after writing the formulas, you could plug into a financial calculator to get the answer.

Procedures

There will be frequent homework including spreadsheet projects; four quizzes; a midterm test; and a final exam.

For homework, quizzes, and tests, answers are expected to include all the work necessary to do the problem.

Homework and Quizzes15% (4 Quizzes @3% each and homework @ 3%)

Exams 50% (2@25 % each)

Lab Projects 30% (3% each except for Labs 6 & 7 which are 6% each)

Attendance: Required at all talks 5% (1% each)

All work in this class must be your own. You may discuss the labs with a classmate, but you must complete the lab independently. You may not “work together” on a lab and then both turn in that lab under each of your names. An evidence of cheating will be dealt with swiftly and severely.

Academic Adjustments

Students who have been certified by the Office of the Dean of Students -- Adaptive Programs aseligible for academic adjustments should go to MATH 242 and request an Information Sheet for this semester that explains how to proceed this semester to get these adjustments made in Mathematics courses. This should be done during the first week of classes. Only students who have been certified by the ODOS-Adaptive Programs and who have requested ODOS to send their certification letters to their instructors are eligible for academic adjustments.

Students, who are currently undergoing an evaluation process to determine whether they are eligible for academic adjustments, are encouraged to find out now what procedures they will have to follow when they are certified, by requesting the above mentioned Information Sheet from MATH 242.

Large print copies of the Information Sheet are available from MATH 242 upon request.

Course Outline

While this outline tries to be complete and accurate, there will be changes in the schedule of the course; these will be announced in class and on the web.

Date Topic

8/22Introduction

8/24Interest Theory

8/29 Interest Theory

8/31 Lab 1: Using Excel

9/5Interest Theory

9/7 Lab 2: PU Life Profit

9/12 Interest Theory and Quiz 1

9/14Richard Penney

Head of Purdue Actuarial Science Program

9/19 NO CLASS

9/21Lab 3:Pricing an Annuity

9/26Interest Theory

9/28Lab 4: Pricing: Term

10/3 Interest Theory and Quiz 2

10/5James Miles, FSA

Deloitte Consulting, Indianapolis

10/10No Class – FALL BREAK

10/12Interest Theory

10/17 Mid Term Exam

10/19 Lab 5: Macros

10/24Life Insurance Pricing

10/26Lab 6: Pricing

10/31Kevin Murphy

Indiana Farm Bureau, Indianapolis

11/2 Lab 6: (Cont)

11/7Principles of Insurance – Chapter 1

11/9Lab 7: Claim Reserves

11/14 Andy Henn

Wellpoint, Indianapolis

11/16Lab 8: Probability

11/21Principles of Insurance – Chapter 2 and Quiz 3

11/23Thanksgiving!

11/28Rate Making and Loss Reserving – Chapter 2

11/30Rate Making and Loss Reserving – Chapter 2 and Quiz 4

12/5Darrell Doddridge

Ernst and Young, Indianapolis

12/7Review for Final

Finals Week Final